With venture totals slipping year-over-year in key markets like the United States, and concern that venture firms themselves are struggling to raise more capital, founders might be worried. After all, if private-market investment doesn’t perk up in the coming quarters, we could be on track for yet another year of declines in total startup investment […]
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Norwest Venture Partners, a 65-year-old firm backed solely by Wells Fargo, has raised its 17th fund at $3 billion.
That’s a noteworthy number, given that NVP last raised the same amount in December 2021. That was the peak of the venture boom, and at that time, the firm said it increased its capital pool by 50% (NVP’s 2019 fund closed at $2 billion) because it needed to stay competitive in the dealmaking environment where round sizes and valuations have climbed to unprecedented levels.
But things have obviously changed since then. Investors are backing fewer companies, and valuations have dropped and may fall further.
Jeff Crowe, a senior managing partner, admitted that the investment rate in venture and certain sectors is slower than it was several years ago, but he said that dealmaking in certain strategies, sectors and geographies, such as growth equity, healthcare and India, is as robust as it was before the downturn.
“We’ve kept a very steady pace and have delivered a number of nice exits,” Crowe told TechCrunch. “We felt it makes sense to keep going at the same pace.”
Since closing its previous fund, the firm has helped 36 companies realize liquidity. Not all exits were great outcomes for the firm (NVP’s portfolio company VanMoof filed for bankruptcy protection), but returns from certain exits greatly outweighed the losses, according to Crowe. He pointed to the firm’s sale of Spiff to Salesforce, the buyout of Avetta by EQT for a reported $3 billion, and the IPO of Indian-based Five Star Business Finance.
Crowe declined to comment on returns, but said: “This is fund 17. We’ve been doing this for a long time, and in the venture world, you get to stay in business if you deliver really good returns.”
NVP attributes much of its success to operating out of one large global multi-strategy fund. The firm invests in North America, India and Israel. It has an early-stage and growth equity business, and has recently added a biotech team to round out its existing healthcare practice.
The diversified approach allows the firm to adjust its strategy when the market changes. For instance, NVP planned to invest in crypto companies when it raised its last fund, but the sector fell out of favor shortly after that, and the firm didn’t pursue many deals in the space.
“Our diversified strategy works well through ups and downs of investment cycles,” Crowe said. “It gives us flexibility. That’s the beauty of it. We react faster to changes.”
Flipkart co-founder Sachin Bansal is in talks to raise capital for his new startup, Indian fintech Navi. Bansal is talking to investors to raise at a valuation of around $2 billion, three sources familiar with the matter told TechCrunch. One source said he is looking to raise between $200 million and $400 million.
Bansal has largely self-funded Navi up to now, and this would be the Bengaluru-headquartered startup’s first large outside fundraise since it was founded in 2018.
Talks have yet to materialize into a deal, so the terms, as well as Bansal’s appetite for outside funding, may change, the sources cautioned. A Navi spokesperson declined to comment.
Navi, which offers personal and home loans as well as health insurance to customers, has been through a few financial twists and turns. Navi originally wanted to raise $440 million in a public listing, according to paperwork it filed in 2022. With the IPO market in a slump, however, the startup abandoned those plans last year.
The funding deliberations point to a significant shift in the venture market in India and are an encouraging sign for fintech more globally. After a particularly rough 2023 in which overall startup funding fell 73% in the country, this could be a signal that growth-stage funding rounds are back on the table.
Abu Dhabi’s sovereign wealth fund ADIA is in talks to back Indian audio-storytelling platform Pocket FM, TechCrunch reported last month. Indian eyewear brand Lenskart, Temasek-backed consumer nutrition platform HealthKart, and bike-taxi aggregator Rapido are also in talks to raise new growth-stage rounds, Indian outlet Economic Times reported Thursday. Khazanah, Malaysia’s sovereign wealth fund, is among investors that Swiggy-backed Rapido has engaged with in recent weeks, one source familiar with the matter told TechCrunch.
India’s startup ecosystem saw a steep decline in large funding rounds last year as global investors, including Tiger Global and SoftBank, reduced their investments, while domestic VC firms shifted their focus to early-stage companies, according to a recent Bain report.
The Reserve Bank of India’s regulatory actions in recent years have also impacted startups issuing cards and lending, further spooking many investors in the fintech sector.
Under Bansal, Flipkart was a trailblazer for startups in India, raising billions of dollars from a storied list of strategic and financial investors. He then left the startup in 2018 with a $1 billion windfall and opted for a bootstrapped approach for Navi, which he founded the same year.
Even if this might become Navi’s first external raise, that doesn’t mean Bansal has not been talking to interested parties. As TechCrunch previously reported, the fintech spoke to potential investors, including SoftBank, ahead of its IPO filing. Those discussions stalled after Navi’s application for a banking license was rejected by the country’s central bank, TechCrunch previously reported.
In recent quarters, Navi has narrowed its focus. It sold its microfinancing unit Chaitanya India for $178.5 million in August as part of a “strategic plan to focus on our digital-first businesses,” Bansal said at the time.
In an interview published by the Indian outlet Moneycontrol on Tuesday, Bansal said he would revive plans for the IPO, but only in a “few months, once we are ready.”
Bansal has also not given up the idea of turning Navi into a bank. “For now, I would say we have parked them, until we see that it is a possibility again in the future,” he told the Indian outlet. “Then we will pick up again when there’s some green light from the regulator at the right time.”
Paris-based startup Pigment has raised a $145 million funding round just five years after its inception. The enterprise software company offers a business planning platform for large companies to visualize their past financial performance and forecast upcoming quarters.
This funding round comes as a bit of a surprise as large rounds have been few and far between in France. According to a recent study from EY, funding rounds in the French tech ecosystem were down 38% in 2023 compared to 2022.
But if you remove buzzy AI startups like Mistral AI and capital-intensive infrastructure plays that are not really tech startups, like EV charging networks (Driveco) and EV battery factories (Verkor), funding rounds are drastically down. Pure software startups have had a rough couple of years.
Pigment appears as an exception with its Series D. Existing investor Iconiq Growth is doubling down by leading this new funding round. Sandberg Bernthal Venture Partners, IVP, Meritech, Greenoaks and Felix Capital are also participating — many of them were existing investors too.
And there’s a reason why Pigment managed to raise so much at a significantly higher valuation less than a year after its previous funding round. In 2023, the startup managed to triple its revenue and double its customer base with well-known clients like Unilever, Datadog, Kayak and Merck. Half of Pigment’s clients are based in the U.S.
“Our current investors told us ‘if you’re going to raise money in 18 months to scale with others, we might as well offer you great terms right now for an internal round.’ And everything happened very quickly … In one week, it was a done deal,” co-founder and co-CEO Eléonore Crespo told me.
Before Pigment, Crespo worked for VC firm Index Ventures and Google. She co-founded Pigment with Romain Niccoli, who was the co-founder and CTO of adtech startup Criteo — an early success of the French tech ecosystem.
“IVP — one of our backers — benchmarks the growth rate of all SaaS companies. And since we’ve been selling our product, we’ve been in the top 5% of SaaS companies with the best growth rate ever, in terms of revenue growth,” Crespo said.
Image Credits: Pigment
Pigment is a flexible business planning tool that is used by chief financial officers and finance teams to create reports and budgets. It’s a modern SaaS platform, meaning that you can integrate it with all your company’s data (ERP, HRIS, data lakes, etc.) and use it as a collaboration tool.
In addition to finance teams, sales teams can use Pigment to create quotas and see how everyone is performing against quarterly quotas. HR teams can see how they should scale the workforce up and down based on strategic changes and financial objectives.
“We’ve done a lot of work to address other teams, not just finance teams. We’ve developed a lot of modules that enable us to serve HR teams, supply chain teams and sales teams,” Crespo said.
In fact, as more teams start using Pigment, it becomes an important tool for cross-team collaboration. And it’s supposed to work better than legacy tools from Oracle and SAP.
Like many software companies, Pigment has also added AI features. As Pigment acts as the central repository for all the important metrics of a company, customers can ask questions to Pigment AI in natural language to get a quick answer. Examples include “Can you give me a breakdown of revenue per country?” or “Why was our actual revenue lower than our forecast last quarter for this product?”
But more importantly, the company has optimized its core product so that it works well even with large datasets and complicated calculations. The best enterprise software products are must-have products, which means that companies usually don’t need to spend a lot of resources on improving the product — clients need this tool to operate. Pigment is still the challenger in this industry, so it believes it needs to provide a better product to compete with other business planning products.
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